JWT’s AnxietyIndex is designed as a place to discuss how brands and consumers are responding to the global recession. With daily content updates, AnxietyIndex.com includes contributions from around JWT’s network, offering a truly global perspective.

Tagged 'coffee'

Honduras is one of the world’s largest coffee growers, but it’s also a very poor country, with almost two-thirds of the population below the poverty line, according to the World Bank. Feeling stuck in an environment that offers little opportunity to get ahead, many young people fall into a life of gangs and crime through intimidation or the promise of status and riches.

Enter Kenco’s recently launched Coffee vs. Gangs program, developed in partnership with JWT London. The coffee brand is sponsoring a yearlong education program for 20 at-risk youth, who will live on a coffee farm and learn the skills required to work in the industry. The effort is detailed on a microsite, coffeevsgangs.com. The program is part of a €200 million “Coffee Made Happy” effort from parent company Mondelēz to make coffee growing around the globe more sustainable by 2020; the company is looking to work with a million small-scale farmers to push a variety of improvements in agricultural and labor practices.

Kenco’s effort illustrates the concept of “shared value,” with the company supporting a good cause while also helping itself by ensuring at least a small supply of well-trained youth. Meanwhile the program helps assure conscientious consumers that, among all the coffee brands claiming sustainability, Kenco is one that’s deserving of their support.

In Greece, going out for a coffee is a favorite leisure activity, as we’ve previously noted. But the financial crisis has slashed disposable income. Some major coffee chains like Starbucks and Costa Coffee have closed branches and, in some cases, left the market altogether. Homegrown brand Mikel Coffee Co., however, has been doing well since it launched in 2008 at the start of the crisis.

Mikel coffee shops are sprouting up like mushrooms, overtaking established local and international players, and soon there will be more than 100 branches in Greece. In 2013, Mikel reported a gross profit of €991,237. The secret to Mikel’s success is catering to a multitude of consumer needs. The prices are competitive, but not low enough to affect quality and brand perception (indeed, Starbucks has been forced to adjust its prices to be able to compete). Consumers also appreciate the generous freebies (small cakes, savory snacks, etc.) that come with the coffee. The stores are open longer than many competitors, with most operating from 5 a.m. till 11 p.m. or midnight. Mikel also offers home delivery, which is proving very popular, particularly for businesses.

The shops answer Greeks’ need to enjoy coffee out of home and socialize like they used to pre-crisis, and let them do so in an affordable way while still catering to the quality expectations Greeks have for their cafés. The chain has become very popular among youth, and the fact that it’s a Greek success story further helps drive brand preference. The moral of the story: When catering to the right needs with the right ingredients, you can succeed even in a crisis environment.

Greeks love their coffee. In fact, they are one of the highest coffee-consuming nations in the world, with an average per capita consumption of 5.5 kilograms vs. a global average of 1.3. Before the crisis, most people’s daily fix was provided by coffee shops—many of them corporate chains like Starbucks and Flocafé—which charged premium prices. With the advent of the crisis, however, the often twice or more daily fix became a pricy habit—leaving many Greeks priced out.

Coffee producers Nestlé and Kraft capitalized on this by promoting homemade coffee machines that work with capsules. These sleek and modern machines sit comfortably on a countertop and allow consumers to easily create a variety of high-quality, barista-style coffees at home for a fraction of the cost charged by the shops. Often, the machines are sold with a hefty promotional rebate to help consumers get started since the companies make money by selling the coffee capsules. In Greece, this model was originally pioneered by Nespresso, who sells capsules from dedicated boutiques or via online delivery.

Nespresso’s huge success was emulated by Kraft with its Tassimo machines. Such is the demand that Nestlé even introduced a less premium-positioned range called Dolce Gusto to compete with Tassimo—both the latter brands sell capsules directly from the supermarket. In an economy where almost all categories have seen single- or double-digit declines, the capsule coffee market and its machines have increased by 45 percent over the last two years alone. These brands recognized the importance of coffee to the average Greek citizen, and provided a more cost-effective solution for them to fulfill their needs.